Saudi restaurant sales surge over 13% to $24bn in 2023: SAMA report

The average transaction per operation witnessed a 10 percent decline, falling from SR38 in 2022 to SR35 in 2023
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Updated 27 February 2024
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Saudi restaurant sales surge over 13% to $24bn in 2023: SAMA report

RIYADH: Saudi restaurant sales surged by 13.66 percent to SR89.3 billion ($23.8 billion) in 2023, up from SR78.6 billion in 2022.

According to the Saudi Central Bank’s monthly bulletin, the total sales made in cafes and restaurants in the last month of 2023 reached SR8 billion, compared to only SR7.3 billion in the same period in 2022.

The number of e-commerce transactions using Mada cards in December 2023 reached 81 million transactions amounting to SR13.6 billion, marking a 14.9 percent sales increase compared to the corresponding period in 2022.

However, the average transaction per operation witnessed a 10 percent decline, falling from SR38 in 2022 to SR35 in 2023, the data from the central bank, also known as SAMA, showed.

The noticeable decline in the profits of the restaurant sector is attributed to several factors, including increased competition, oversupply in certain areas, and evolving consumer preferences for diversity, as reported by AlEkhbariya.  

Additional factors contributing to the decline include challenges in customer satisfaction and the increasing impact of non-food quality aspects on restaurant visits. This encompasses factors like the restaurant’s marketing proficiency and content creation across various platforms. 

Data released by the institution revealed that cafes and restaurants visited by Saudis played a role in a 13.35 percent annual spending increase across the Kingdom in November 2023.

Commercial rental prices, particularly in major cities, have seen a notable surge, coupled with a sharp uptick in operational expenses for restaurants. Moreover, restaurants are increasingly dependent on delivery apps, which can deduct up to 30 percent of the meal’s value. 

The restaurant and cafe sector is integral to the “Quality of Life” program and Vision 2030 goals, serving as a key element in shaping the program. The 2018 document outlines an objective to double the current figures, aiming for 3,000 restaurants and over a thousand cafes per million people by 2030. 

The restaurant market in Saudi Arabia currently surpasses SR95 billion and is projected to expand further to over SR150 billion. In 2023, the combined market size of restaurants, cafes, and food reached SR95 billion, with expectations to surpass SR166 billion by 2030.


Fitch affirms Jordan at ‘BB-’ with stable outlook as reform momentum builds 

Updated 10 sec ago
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Fitch affirms Jordan at ‘BB-’ with stable outlook as reform momentum builds 

RIYADH: Jordan’s long-term foreign-currency issuer default rating has been affirmed at “BB-” with a stable outlook by Fitch, citing the country’s macroeconomic stability and progress in fiscal and economic reforms. 

The US-based credit rating agency added that the grade, along with the stable outlook, also reflects Jordan’s resilient financing sources — including a liquid banking sector, a robust public pension fund, and continued international support. 

Despite the stable outlook, Jordan’s credit rating remains lower than that of several other countries in the region. In February, Fitch affirmed Saudi Arabia’s IDR at “A+” with a stable outlook, while the UAE was rated “AA-.” 

In its latest report, Fitch stated: “The ratings are constrained by high government debt, moderate growth, risks stemming from domestic and regional politics, and current account deficits and net external debt that are higher than rating peer.” 

According to the agency, a “BB” rating signifies elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time, although some business or financial flexibility exists to support the servicing of financial commitments. 

The report noted that Jordan’s government remains committed to advancing its three-pillar reforms across the economic, public administration, and political sectors, despite external pressures. 

Fitch added that the pace of reform will continue to be influenced by the need to preserve social stability, resistance from vested interests, and institutional capacity constraints. 

Jordan’s gross domestic product expanded by 2.5 percent in 2024, and Fitch projects growth of 2.7 percent in 2025 and 2.8 percent in 2026. 

“This reflects our assumptions of headwinds from weaker global growth, partly balanced by recovery in tourism from Europe following an easing of regional conflicts. Iraq will remain a dynamic export market for Jordan and nascent trade with Syria could add further impetus,” the report said. 

In April, the International Monetary Fund offered a similar projection, forecasting 2.7 percent growth in 2025, driven by a rebound in tourism and improved domestic demand. 

Fitch also noted that the imposition of US tariffs and the resulting uncertainty will slow global demand, which is expected to impact demand for Jordanian exports. 

Exports to the US accounted for 26 percent of Jordan’s total in 2024, including 27 percent from precious metals and stones — categories that are exempt from duties. 

Apparel made up 56 percent of Jordan’s exports to the US, and this sector faces the risk of a 20 percent tariff. 

According to Fitch, the general government deficit stabilized at 2.4 percent of GDP in 2024, amid higher interest payments and lower capital expenditure. 

The agency projects the deficit will rise to 2.6 percent in both 2025 and 2026, as continued spending restraint is offset by growing interest costs. 

The report further warned that persistent geopolitical risks could negatively impact Jordan’s credit profile, even as it benefits from strong multilateral and bilateral support. 

“As tensions between Israel and Iran remain heightened and the war in Gaza continues, geopolitical risks remain high. Uncertainty remains regarding the course and duration of the conflict,” said Fitch. 

Other factors that could weigh on Jordan’s credit rating include a weakening of support from external partners and a marked increase in external indebtedness. 

Jordan is on track to receive disbursements under its four-year, $1.2 billion Extended Fund Facility with the IMF. 

It has also entered into a new program with the EU, which includes €1 billion ($1.07 billion) in macro-financial assistance. 

Fitch identified several factors that could lead to a rating upgrade, including a sustained decline in government debt as a share of GDP and a return to growth levels above pre-pandemic averages, resulting in lower unemployment.


US Fed sees rising risks to economy as it leaves rates unchanged

Updated 08 May 2025
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US Fed sees rising risks to economy as it leaves rates unchanged

WASHINGTON: The Federal Reserve held interest rates steady on Wednesday but said the risks of higher inflation and unemployment had risen, further clouding the US economic outlook as its policymakers grapple with the impact of President Donald Trump’s tariffs.

At this point, Fed Chair Jerome Powell said, it isn’t clear if the economy will continue its steady pace of growth, or wilt under mounting uncertainty and a possible coming spike in inflation.

With so much unsettled about what Trump will ultimately decide and what of that survives possible court and political battles, “the scope, the scale, the persistence of those effects are very, very uncertain,” Powell said in a press conference at the end of a two-day policy meeting.

“So it’s not at all clear what the appropriate response for monetary policy is at this time ... It’s really not at all clear what it is we should do,” he said, adding: “I don’t think we can say which way this will shake out.”

It was Powell’s subtle way of saying the US central bank, a key actor in shaping the economy, was effectively sidelined until Trump’s sweeping policy agenda takes full effect.

The Fed’s policy statement, which held the benchmark overnight rate steady in the 4.25 percent-4.50 percent range, noted that since the central bank’s last meeting in March “uncertainty about the economic outlook has increased further,” and that risks were increasing that both inflation and unemployment could increase.

Thomas Simons, chief US economist at Jefferies, said the language downplayed just how much disruption had occurred since the Fed’s March 18-19 meeting, and how unpredictable the outlook had become.

“All of the ‘Liberation Day’ tariff news, the April 9 announcement of a 90-day delay, the back and forth on trade deals and tariff exemptions in the headlines, and the resultant negativity expressed in business and consumer surveys make it impossible to judge what the economic outlook is, let alone whether the skew of risks around it has changed,” Simons wrote, calling Powell “predictably noncommittal” given the situation.

Risks to dual mandate

The Fed’s statement, and much of Powell’s comments to reporters as well, vouched for the economy’s continued resilience, with job gains continuing and the economy still growing at a “solid pace.”

The recently reported decline in gross domestic product in the first quarter, Powell said, was skewed by a record rush of imports as businesses and households tried to front-run expected import taxes, with measures of domestic demand still growing. But even that data demonstrated the dilemma facing the Fed. The rush of front-loading to buy goods and stock shelves won’t likely be repeated, and it

is unclear whether underneath it all demand and investment are starting to weaken — and how that will eventually express itself in “hard” data on inflation and jobs. The Fed’s own “Beige Book” of anecdotal reports about the economy recently gave a dour picture of suspended business deals, falling demand, and rising prices.

“Businesses and households are concerned ... and postponing economic decisions of various kinds,” Powell said. “If that continues and nothing happens to alleviate those concerns, you would expect that to show up in economic data.” The Fed can’t respond, however, until it is clear which way the economy pivots, and how it assesses the risks to its two goals of holding inflation to 2 percent and sustaining maximum employment.

“The current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments,” Powell said, affirming a wait-and-see approach that has become the central bank’s calling card in the first months of the Trump administration.

US stock prices extended gains after the release of the Fed’s unanimous policy decision and ended higher on the day. Treasury yields fell, while the dollar gained against a basket of currencies.

Holding pattern

The direction of Fed policy will depend on which of the job and inflation risks develop, or, in the more difficult outcome, whether inflation and unemployment increase together and force the central bank to choose which risk is more important to try to offset with monetary policy.

A weaker job market would typically strengthen the case for rate cuts; higher inflation would call for monetary policy to remain tight.

“For the time being the Fed remains in a holding pattern as it waits for uncertainty to clear,” said Ashish Shah, chief investment officer of public investing at Goldman Sachs Asset Management, adding that “recent better-than-feared jobs data has supported the Fed’s on-hold stance, and the onus is on the labor market to weaken sufficiently to bring a resumption of its easing cycle.”

The Fed’s policy rate has been unchanged since December as officials struggle to estimate the impact of Trump’s tariffs, which have raised the prospect of higher inflation and slower economic growth this year.

When policymakers last updated their economic and policy projections in March, they anticipated reducing the benchmark rate by half a percentage point by the end of this year. 


Oil Updates — prices edge up on US-China trade talk hopes

Updated 08 May 2025
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Oil Updates — prices edge up on US-China trade talk hopes

TOKYO: Oil rose on Thursday after falling more than $1 in the previous session, supported by hopes of a breakthrough in looming trade talks between the US and China, the world’s two largest oil consumers.

Brent crude futures were up 10 cents, or 0.2 percent, at $61.22 a barrel, while US West Texas Intermediate crude rose 13 cents, or 0.2 percent to $58.20 a barrel at 9:32 a.m. Saudi time.

“Optimism around the US and China trade talks this weekend is a primary factor supporting the rebound in the oil market,” said independent market analyst Tina Teng.

“Signs of a de-escalating trade war improved market sentiment, triggering a rebound in oil prices in an oversold market.”

US Treasury Secretary Scott Bessent will meet with China’s top economic official on May 10 in Switzerland for negotiations over a trade war that is disrupting the global economy. The countries are the world’s two largest economies and the disruptions from their trade dispute are likely to lower crude consumption growth.

US President Donald Trump on Wednesday suggested China initiated the trade talks, adding he was not willing to cut US tariffs on Chinese goods to get Beijing to negotiations. Bessent said the upcoming talks are a start, not ‘advanced’ discussions.

Weak demand concerns capped oil price gains after the Federal Reserve held interest rates steady but warned about rising economic uncertainties.

“The Fed signalled that rates will likely remain on hold until the effects of tariffs become clearer. This boosted the US dollar, which added to headwinds facing the broader commodity markets,” said ING analysts in a report on Thursday.

A stronger US currency makes dollar-denominated oil more expensive for holders of other currencies and dampening demand.

Adding to the concerns of weaker demand, US gasoline inventories rose last week, stoking concerns among analysts that consumption is not building as the US enters the summer demand period later this month.

At the same time, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, will increase its oil output, adding to pressure on prices.


All eyes on investment forum at heart of Trump visit to Riyadh

Updated 08 May 2025
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All eyes on investment forum at heart of Trump visit to Riyadh

  • US business moguls, Saudi ministers and company chiefs to attend invitation-only event in Riyadh

RIYADH: As Saudi Arabia prepares for the visit of US President Donald Trump next week, much media attention has focused on the Saudi-US Investment Forum, an invitation-only event to be held at Riyadh’s Ritz-Carlton hotel on May 13.

US media outlets have reported that high-profile business figures like Elon Musk, Mark Zuckerberg and Larry Fink are poised to attend, while Arab News sources reveal that about 15 Saudi ministers and top-level officials will be present, as well as the CEOs of some of the Kingdom’s biggest companies and giga-projects, in addition to hundreds of business ‘big-wigs’ from both countries.

Other guests will reportedly include OpenAI CEO Sam Altman, Citigroup CEO Jane Fraser, Boeing CEO Kelly Ortberg and David Sacks, the White House AI and cryptocurrency czar.

Invitations to the forum state that it will “provide an exclusive opportunity to deepen engagement, unlock new investment avenues and reaffirm our long-standing economic partnership.”

While military cooperation and security deals are important to both the US and Saudi Arabia, the expectation is that this conference will see new industries and areas of cooperation emerge in what will be a two-way investment forum.

Agreements will be inked that cover sectors such as artificial intelligence, tech and healthcare cooperation and will likely be worth at least $600 billion — a goal set by Crown Prince Mohammed bin Salman in January, when he became the first foreign leader to have a call with Trump after the latter’s return to the White House.

Speaking at the Milken Institute in Los Angeles this week, Saudi Investment Minister Khalid Al-Falih stated that the Kingdom views the US as unmatched in terms of both capital markets and innovation. “There is no close competitor to the US in many aspects, certainly capital markets, their depth and their breadth, and also the innovation spirit,” Al-Falih said.

Arab News will be both participating on panels and reporting all the breaking news from next week’s event.

Trump is expected to arrive in Riyadh on May 13, attend a summit with Gulf leaders on May 14 and then travel to Doha the same day before concluding the first official foreign trip of his second term in Abu Dhabi on May 15.


Closing Bell: Saudi benchmark index edges down 0.31% to close at 11,398

Updated 07 May 2025
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Closing Bell: Saudi benchmark index edges down 0.31% to close at 11,398

RIYADH: Saudi Arabia’s Tadawul All Share Index fell on Wednesday, shedding 35.34 points, or 0.31 percent, to close at 11,398.74. 

The total trading turnover of the benchmark index stood at SR4.813 billion ($1.28 billion), with 74 stocks advancing and 168 declining. 

The Kingdom’s parallel market, Nomu, also closed lower, dropping 175.08 points, or 0.63 percent, to end at 27,777.71, as 24 stocks advanced and 50 retreated.  

Meanwhile, the MSCI Tadawul Index dipped by 1.94 points, or 0.13 percent, to finish at 1,455.78. 

The best-performing stock of the day was Nahdi Medical Co., with its share price jumping 7.26 percent to reach SR121.20. 

The company announced its interim financial results for the first three months of the year, posting a net profit of SR255.2 million — a 61.6 percent increase compared to the previous quarter.

The surge was attributed to higher gross profit driven by increased sales, lower operating expenses due to favorable phasing, and a one-off zakat provision release.   

On the other end, Leejam Sports Co. recorded the steepest drop, with its share price plunging 10 percent to close at SR124.20. 

On the announcements front, Mobile Telecommunication Co. Saudi Arabia, also known as Zain KSA, posted a net profit of SR93 million for the first quarter of the year, marking a 38.8 percent increase year on year. 

The company attributed the rise in net profit to a SR40 million increase in gross profit driven by revenue growth, as well as a 5.2 percent rise in earnings before interest, taxes, depreciation, and amortization, also by SR40 million. 

Zain’s share price fell 8.29 percent during the session to close at SR11.88.  

Saudia Dairy and Foodstuff Co. reported a quarter-on-quarter net profit increase of 36.9 percent, reaching SR126.1 million. The company credited the growth to an improved gross margin of 35.9 percent. Its share price slipped 0.67 percent to close at SR301.20. 

Savola Group posted a net profit of SR189.16 million for the first three months of the year, reflecting a 45.7 percent decline compared to the same quarter last year. 

The company said the drop was primarily due to the absence of share of profit from its divested stake in Almarai, which had contributed SR236.7 million in the previous year. 

However, the decline was partially offset by reduced financial charges following debt settlements completed in 2024 totaling SR89.6 million.  

Savola’s share price fell 7.11 percent during the session to close at SR30.00. 

Arabian Pipes Co. emerged as one of the day’s bright spots, posting a 222.3 percent quarter-on-quarter jump in net profit, reaching SR40.1 million. 

This performance was largely driven by a 63.46 percent increase in gross profit, which rose to SR63.66 million in the first quarter of 2025 from SR38.94 million in the previous quarter.

The company cited higher sales volumes, an improved product mix, and revised supply schedules as the key growth drivers. Its share price rose 0.55 percent to close at SR9.17.  

Arabian Pipes Co. was bullish reporting a 222.3 percent quarter-on-quarter surge in net profit , reaching SR40.1 million.    

The increase was primarily driven by higher gross profit, which rose to SR63.66 million in the first quarter of 2025 from SR38.94 million in the previous quarter, marking a 63.46 percent jump. 

The growth was attributed to a rise in sales volume, an improved sales mix, and adjustments in supply schedules. 

Arabian Pipes Co. share price traded 0.55 percent higher on the main market to reach SR9.17.